At a time with exceptionally low unemployment levels, Glassdoor research says that more than one-third of employers expect more employees to quit this year. How can you retain them? By making the right investments, says Abbey Louie, founder of Élan Consulting Group, LLC, a Meridian, Idaho, leadership consulting firm. So before you consider a new benefit or program, think seriously about investing in three key areas.
Create a great employee experience–even when they plan to quit
“Today, companies often try to ‘buy’ employee satisfaction through office perks and other trendy offerings. In reality, companies should be striving for engaged employees, not just satisfied employees,” Louie says. “You can have a satisfied employee who is happy doing nothing, but an engaged employee feels an emotional connection to the organization and/or the organization’s goals.” She points to well-publicized Gallup research that shows engagement drives greater profitability, lower turnover, fewer safety incidents, higher customer satisfaction, and other advantages. A better investment is to create a great experience.
The first step is developing effective managers, she says. “The most influential factor in employee engagement and performance is the employee-supervisor relationship. Investing in your managers to develop dynamic leaders will provide the greatest impact,” she says. Hire and train managers to communicate well, help ensure that employees are in jobs that are a good fit for them, and give appropriate feedback, to name a few.
And that support should last throughout their employment. Jellyvision, a 400-person, Chicago-based employee communication software company, supports its workers with a suite of benefits like fully paid health insurance, flex time, unlimited vacation, and a 401(k) plan, as well as financial wellness benefits and fun events.
But from the day employees start at the company, they also learn about its “graceful exit” program. When employees begin to look for a new job, they’re encouraged to share that with their managers, who will support them in the search, says Kelly Dean, Jellyvision’s vice president of people, who recently took on the role from her predecessor who started her graceful leave process roughly two years ago. Those who inform their supervisors at the start of their search will still get their raises, end-of-year bonuses, time off to interview, and other benefits without the awkwardness of trying to hide their actions.
“Fundamentally, what drives retention here more than anything, and it’s a very unconventional thing, is that we trust people and we treat them like adults. And we expect them to behave in the same way,” Dean says.
Show them a way up
Workforce retention expert Jeff Butler says that employers must shift their focus to include employee priorities. Gone are the days of a buyers’ market when it comes to talent. Now, you need to be sure your employees are growing with you. “In terms of retention, the first thing that any employer needs to ask whoever they’re hiring is where they want to be in three to five years, because the reason why people leave is that they’re not set on their paths to where they want to go,” he says.
Artist and entrepreneur Keba Konte runs his company that way. He opened his Oakland, California-based Red Bay Coffee in 2014. The coffee company has both a retail arm and imports and roasts coffee from around the world. From the start, Konte’s vision for his business was one of diversity and inclusion. He wanted to give more people an opportunity to work in the coffee industry’s “more high-margin sectors–the roasting, the retail ownership, education, changing equipment,” he says.
His staff includes women, people of color, and the formerly incarcerated. He pays them above minimum wage—employees in Oakland start at $15 per hour plus tips–and uses profit sharing to let employees benefit from the company’s success. The Glassdoor report found that salary is the No. 1 reason employees move on.
Konte also believes career paths are critical. Even though he only has 18 employees, he’s helped some of them move into managerial positions or move from the retail side to quality assurance positions with overseas travel. “People need to see where they’re going in the organization,” he says. While the Bureau of Labor Statistics reports that accommodation and food services businesses had an average annual turnover rate of 72.5% in 2017, Red Bay still has more than three-quarters of the employees it has hired over the life of the company, including each of its first five employees, he says.
Let them contribute
Nearly three out of five (56%) employees expressed that the opportunity to use their skills and abilities was a very important contributor to job satisfaction in the 2017 Society for Human Resource Management’s (SHRM) “Employee Job Satisfaction and Engagement” report. “Employees who feel a sense of purpose and who feel valued in their role will always give more. Research shows that focusing on what they can bring to the team fosters this sense of purpose more than focusing on what the organization can do for them,” Louie says.
To encourage employees to share their great ideas for implementation, West Monroe Partners, a Chicago-based business and technology consulting firm with roughly 1,000 employees, developed an internal version of Shark Tank, where employees can pitch ideas to executives to apply for funding. One project–the nCino Center of Excellence, which revamped the way the company implements nCino, a bank operating system—was funded and has brought in $10 million in revenue over the last three years.
The program is “a really good example of that, of how we try and engage people and get them to be an intrapreneur and think about ways that they can contribute to our growth, and their own personal and professional development,” says Reva Busby, senior manager of innovation and strategic growth, at West Monroe Partners, a Chicago-based business consultancy. She credits programs like their Shark Tank, as well as a culture that encourages employees to act like owners, allows them to develop their careers, and participate in employee stock ownership program, as part of the reason the company has an annual turnover rate of 12%. This is less than half of typical consulting companies.
While it’s important to invest in employees, doing so strategically in the areas that are proven to increase engagement and foster loyalty among employees can go a long way to improving retention.